What it does
Seeing Machines PLC (LON:SEE) makes driver monitoring systems (DMS) that can be used in cars, trucks, trains and aircraft.
The technology tracks the eye gaze, head position and pupil size of drivers or pilots to determine whether they are drowsy or distracted.
Seeing Machines sees an opportunity for its DMS in the autonomous vehicles market that is being developed by the likes of Tesla, General Motors and Alphabet‘s Waymo.
There are different levels of autonomy with level 0 being when you hear a beep as you approach an object when reversing and level 5 being when the steering wheel becomes superfluous.
The AIM-listed group is based in Canberra, Australia but serves markets across Europe, North America, Latin America, the Middle East and the Asia Pacific.
How it is doing
In early September, Seeing Machines unveiled a new three-pillar embedded product strategy for the automotive market targeting what it said is the “rapidly expanding camera-based interior monitoring market”.
The first pillar involves the company’s FOVIO Chip being newly enhanced with its Occula Neural Processing Unit, while the second strand is a “low-friction integration pathway into any vehicle integration point” including smart mirrors, instrument clusters, infotainment displays or centralised processing systems.
The final pillar will see the company make Occula available for license as an application-specific integrated circuit (ASIC) to semiconductor companies for integration with any automotive computing platform.
This followed a bullish trading update in August, which saw the firm’s revenue, profit and cash all come in ahead of target for the year to end-June, 2020.
Annual revenue is expected to be A$39.7mln, versus guidance of A$36.6mln and up around 24% on the previous year in spite of the challenges of the coronavirus (COVID-19) pandemic on its core markets, while total income is expected to be A$42.6mln, up 30% on the previous period, the provider of driver monitoring systems said in a trading statement.
The company’s Guardian technology platform was also connected to 23,415 vehicles globally by the end of June, a 46% increase over the year. Seeing Machines’ net cash position was A$38.7mln at year-end, which was 22% above guidance.
In July, the AIM-listed firm welcomed the passing in the US House of Representatives of the ‘Moving Forward Act’, a new automotive safety bill.
It promises to drive demand for the company’s own DMS technology, which use cameras and facial recognition to ensure drivers are paying attention to the road.
Meanwhile, the European new car assessment programme (NCAP) announced a delay to the 2022 and 2024 due to the pandemic so that automakers and Tier 1 suppliers have more time to incorporate necessary changes, but it is not expected to hit the company’s near-term forecast for automotive revenue.
Amid the crisis, Seeing Machines cut the cost base by A$12mln and restructured its business to “improve the focus on profits” for its three main units – automotive, fleet/off-road and aviation.
What the boss says: Paul McGlone, chief executive
“It’s an exciting time in the automotive industry and I’m delighted to be announcing our detailed technology strategy, which has been constructed to closely support OEMs as they design cars to meet mounting safety standards and deliver convenience features for their customers.”
“Seeing Machines has been leading this market for many years now and our three-pillar approach is no accident. We have leveraged our teams’ years of experience, deep knowledge of industry requirements, and close customer relationships to support the many and varied requirements for DMS integration into cars as demand continues to accelerate around the world.”
What the broker says
In a note on September 4, 2020, analysts at Cenkos Securities said the company’s Occula neural processing unit alongside its new ’embedded product strategy’ for the automotive market is a “further step change” in delivery of DMS technology.
The firm’s ‘house’ broker, which rates the company at ‘buy’, said the Occula unit “significantly extends” the company’s technology lead, while the brand launch also demonstrated that the company is “stepping up its marketing, having kept relatively quiet about its technology development path for competitive reasons”.
Cenkos noted that the technology being applied to the company’s FOVIO chip implementations means “existing FOVIO chip customers can benefit as the processing headroom provided” enables room for new features to be added off the same hardware.
“We see the launch of Occula as an exciting development for the company with this step-change in the Seeing Machines technology expected to further the gap from its peers in benchmark testing. It is the result of significant work under the radar and the announcement demonstrates confidence in the company that it has world-class technology not just in DMS but also human tracking and detection”, the broker’s analysts said.
“This will undoubtedly increase its potential market share in automotive but will also no doubt pique the interest of other technology developers and integrators. Seeing Machines is therefore opening back up from a transportation focussed technology company to a human-machine interface technology supplier which could deliver further significant value to investors which is not reflected in the current share price”, they added.
- Traction in all key areas where Seeing Machines operates
- More contracts for DMS technology
- Revenues start to build as contracts ramp-up
- Demand for new Occula system